The USA Federal Deposit Insurance coverage Company (FDIC) has despatched a letter to executives of cryptocurrency trade CEX.IO warning them that they’re doubtlessly in violation of federal regulation resulting from false and deceptive statements in regards to the trade’s insurance coverage standing. The company has given the trade 15 days to make corrections.

The assertion in query is discovered within the small print particulars of the trade’s state cash transmitter license info. The knowledge for Rhode Island reads, “U.S. {dollars} held in your CEX.IO fiat forex pockets are FDIC-insured as much as $250,000 per account.”

The FDIC letter additionally famous that if the trade has an FDIC-insured account, the insured depository establishment holding the funds have to be named. The letter, signed by FDIC assistant normal counsel Seth Rosebrock, cites the Federal Deposit Insurance coverage Act all through. The letter clarifies:

“CEX is just not FDIC-insured, and FDIC insurance coverage doesn’t shield cryptocurrency or any property aside from U.S. greenback deposits held at IDIs [insured depository institutions].”

The FDIC demanded that CEX.IO take away statements that indicate it has FDIC insurance coverage, stop and desist from making any statements to that impact, and make clear any statements referring to “pass-through insurance coverage arising from the location of funds in accounts at IDIs.”

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The company, which is an impartial company created by the U.S. Congress and financed by insurance coverage dues, mentioned that enforcement actions it would take embrace the issuance of cease-and-desist orders and the evaluation of civil financial penalties.

At this time, we issued letters demanding 4 entities cease making false and deceptive statements about FDIC deposit insurance coverage and to right these falsehoods. Learn extra ➡️ https://t.co/TqdIZkD502. pic.twitter.com/K1qkUBjP0Z

— FDIC (@FDICgov) February 15, 2023

The FDIC additionally discovered two web sites with evaluations of CEX.IO that claimed the trade had FDIC insurance coverage. It sent letters demanding analogous adjustments to these statements as effectively. One of many web sites, Bankless Occasions, is based in the UK.

The FDIC’s insistence that crypto shouldn’t be insured has garnered reward from crypto skeptic Senator Elizabeth Warren. The company was additionally one of many three signatories of a current assertion warning banks of the hazards of crypto.